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Saab Saved--For Now--By Mystery Order For 582 Cars

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June 27, 2011

Just last week, it looked like the end was near for Saab. The Swedish automaker announced that they couldn’t make payroll and had extended their production stoppage through July 3. Nearly as bad, a proposed payment schedule for existing suppliers had Saab paying just 10 percent of outstanding totals due until additional funding could be secured. Many in the industry began to see a Saab bankruptcy as pending, not just possible.

Now comes word that a mysterious Chinese benefactor has placed an order, paid in advance, for 582 Saab automobiles worth approximately $18.4 million. The amount will allow Saab to meet payroll, pay key suppliers and resume production, at least temporarily. More short-term funding is needed to keep Saab operational, and CEO Victor Muller remains committed to finding a new source of cash for Swedish Automobile, formerly known as Spyker.

Russian financier Vladimir Antonov still has interest in funding the struggling automaker, but is awaiting a decision from the European Investment Bank approving him for an equity stake. Antonov, rumored to have previous ties to organized crime, has already been cleared by the Swedish National Debt office, but the EIB appears hesitant to green-light his investment in Saab.

This new order buys Saab time, but it’s still not nearly enough to return them to fiscal health. Deals with Chinese investors Pangda and Zhejian Youngman Lotus Automobile are still awaiting Chinese government approval, which may not be forthcoming as the Chinese look to consolidate their automotive industry.